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College Accounting

John Price, University of North Texas
M. David Haddock, Chattanooga State Technical Comm. College
Horace Brock, University of North Texas
Connie Hahn, Southern Alberta Institute of Technology
Traven Reed, Canadore College

Completing the Accounting Cycle for a Merchandising

Multiple Choice Questions


1	What does the first section of a classified income statement contain?
		A)	Revenue from operations
		B)	Expenses from operations
		C)	Assets from operations
		D)	Capital invested during operations


2	How is gross profit on sales calculated?
		A)	Expenses less revenue
		B)	Revenue less cost of goods sold
		C)	Cost of goods sold less revenue
		D)	Cost of goods sold less expenses


3	Income earned from non-operating sources is reported in which section of the Income Statement?
		A)	Revenue section
		B)	Cost of goods sold section
		C)	Other income section
		D)	Capital section


4	In preparing a Statement of Owner's Equity, withdrawls are?
		A)	Added to net income
		B)	Added to beginning capital
		C)	Subtracted from net income
		D)	Added to ending capital


5	How are current assets listed on the Balance Sheet?
		A)	In alphabetical order
		B)	In order of liquidity
		C)	According to the dollar amount, with the largest amount being listed first
		D)	According to the dollar amount, with the smallest amount being listed first


6	What entries are recorded to ensure that an organization has complete and accurate records of its financial affairs for the accounting period?
		A)	Closing entries
		B)	Adjusting entries
		C)	Compound entries
		D)	Correcting entries


7	Where are the adjusting entries posted?
		A)	Adjustments column of the worksheet
		B)	Adjusted trial balance column of the worksheet
		C)	Income statement column of the worksheet
		D)	General ledger


8	When performing closing entries, what accounts are the revenue accounts closed to?
		A)	Income statement
		B)	Expense account
		C)	Income summary
		D)	Capital


9	When performing closing entries, what accounts are the expense accounts closed to?
		A)	Income statement
		B)	Expense accounts
		C)	Income summary
		D)	Capital


10	What is prepared to assist in the drafting of financial statements?
		A)	Adjusting entries
		B)	Worksheet
		C)	Statement of Owner's Equity
		D)	Closing entries

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